An exclusive hotel is under investigation after the financial details of thousands of its guests were found dumped in a skip.

Fraud experts warned the registration cards found in the open skip outside The Grand Hotel in Brighton contained vital information used in identity theft, which affects 120,000 people every year in the UK.

The Information Commissioner's Office (ICO) said the hotel may also have breached the Data Protection Act by wrongly disposing of the cards, understood to include those completed by a number of MPs and other VIP guests.

The cards, filled in by guests on arrival at the £150-a-night five-star hotel on Brighton seafront between 1998 and 2000, included not only card details but also addresses, telephone numbers and signatures.

The Grand Hotel has apologised after more than a dozen boxes of registration documents were left in a skip in Russell Road behind the hotel.

A spokeswoman for the Grand said the skip was removed 24 hours after the cards - which also included passport numbers of foreign guests - were dumped and the cards were destroyed.

However, The Argus understands some of the documents were last night still in the hands of the finder, Brighton-based web designer Charles Crammond, who stumbled upon the documents by accident.

Mr Crammond, 30, said: "There were lots of white storage boxes and several of them were split open. They contained thousands of registration cards and Visa bills, which could have been used to steal people's identities.

"It was shocking because ID fraud is massive and it could have cost guests thousands of pounds. It was a major breach of people's confidentiality."

Mr Crammond tried to warn hotel staff about the contents of the skip, some of which was blowing about in the street, but said they "didn't seem to care".

Mr Crammond said he planned to take the remaining boxes of documents in his possession to the police today.

He said he believed the boxes contained personal details about ministers from the Department of Trade and Industry.

A spokeswoman for The Grand said normal procedure would be for personal documents to be bagged and taken away by a specialist disposal company, which would shred them.

She did not know why that had not happened in this case.

She said: "At the moment there is an investigation. We take it extremely seriously."

She said she did not know whether the information contained information about famous guests, adding: "Generally when VIPs or important people check in they don't usually register in their own names."

A spokesman for the ICO, set up to oversee the Data Protection Act, said the personal details could have fallen into the hands of criminals.

Phil Jones, Assistant Commissioner for the ICO, said: "It would appear that the Grand Hotel has been negligent in safely disposing of documents which contain important personal information about individual guests.

"Clearly, where personal information is not disposed of securely, there is a risk that it can fall into the hands of criminals."